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PROBLEMS FACED BY THE CUSTOMERS REGARDING THE BORROWING OF

THE LOAN IN STATE BANK OF INDIA -AN ANALYSIS

Article · November 2019

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© 2019 JETIR November 2019, Volume 6, Issue 11 www.jetir.org (ISSN-2349-5162)

PROBLEMS FACED BY THE CUSTOMERS

REGARDING THE BORROWING OF THE
LOAN IN STATE BANK OF INDIA - AN
ANALYSIS
1
S.Nachammai , 2 N.Manju
1
Doctoral Research Scholar, 2Research Scholar
1
Department of Commerce,
1
Alagappa University, Karaikudi, Tamilnadu, India.

Abstract : State Bank of India (SBI) is a commercial bank owned by Indian Government which offers a variety of financial services
to its customers ( both individuals and corporate). The major objective of this study is to identify the problems faced by the
customers regarding the borrowing of the loan in State Bank of India. The researcher has used both primary and secondary data.
The primary data were collected from the State Bank Customers in Madurai District. The researcher has collected sample of 175
customers in State Bank of India. Delay in arranging security requirements, no timely support from the bank, delay in sanctioning
loan are some of the major problems faced by the state Bank of India customers regarding borrowing of Loan.

Index Terms - State Bank of India, Commercial Bank, Loans and Advances, Customers, Security.
I. INTRODUCTION
State Bank of India (SBI) is the largest commercial bank in India, in terms of assets, deposits, and employees. It is a public
sector bank. SBI offers a range of general banking services like accepting deposits, lending loans and advances and providing other
auxiliary services to corporate and individuals in India and abroad. State Bank of India is the statutory body headquartered in
Mumbai, Maharashtra. SBI is in 216 th rank in the Fortune Global 500 list of the world's biggest corporations of 2018. It is the
largest bank in India with a 23% market share in assets, besides a share of one-fourth of the total loan and deposits market.
Wants are unlimited. Every individual has different plans. But finance is mandatory for implementing such plans. People
need money for various purposes like education, business, and constructing house and so on. Bank provides loans for public, which
is repayable along with certain percentage of interest. Borrowing loans from bank involves various procedures and formalities.
Bank will demand collateral security for granting loans. This study identifies the problems faced by the customers regarding the
borrowing of the loan in State Bank of India.

II. REVIEW OF LITERATURE

Paul Thompson (1998), studied the lending policies of a sample of UK banks with respect to environment, focusing on
issues of environmental risk management, market segmentation and the exploitation of marketing opportunities and researcher
found that while the banks are placing considerable emphasis on environmental risk management in their corporate lending
operations, there is little evidence of them is harnessing the opportunities presented by the “greening” of industry.
Olusanya, et.,al. (2012), investigated the level of commercial bank loan advances in Nigeria and to aslo examines those
various determinants of commercial banks lending behavior in Nigerian. The study reveals that there is a positive relationship
between Loan and advances and Volume of deposits annual average exchange rate of the naira to the dollar, Gross domestic product
at the current market price and cash reserve requirement ratio except for Investment portfolio and Interest rate (lending rate) that
have a negative relationship. The researcher revealed from the result that there is a long run relationship between Loan and advances
and all the explanatory variables in the model and this shows that commercial bank has a lot of impact of their lending behaviour.
The Commercial bank should endeavour to create more deposit in other to improve their lending behaviour and should enforce the
most easily realizable policies and good credit management in every situation.
Chandra(2015), the researcher studied is an attempt to know the customers' perception towards different banks and the
problems faced while borrowing the loans from the banks. It also throws light on the quality of services, both transaction based and
IT enabled in terms of its constituent factors in public sector, private sector and foreign banks.
Thangam (2017), examined that the coming year the deposits amount may be decreased manner because of heavy rules
for minimum balance maintain in this own account it is not possible for all peoples but only maintain for business man and
industrialist and salaried persons most of the savings account and deposits are maintain by the rural peoples and formers and
Mahatma Gandhi National Rural Employment Guarantee scheme peoples. The rules changes in the banks that time the deposits
will be increased.
Thangam (2017), concluded that the government and bankers has to take serious effort for decrease the NPA otherwise it
thoroughly damages the bank profit of the banker and also is not good for the developing countries.

III. OBJECTIVES
1. To analysis the socio- economic condition of State Bank of India’s customers.
2. To identify the problem faced by the customers regarding the borrowing of the loan in State Bank of India.

IV. METHODOLOGY
The researcher used both primary and secondary data for the study. The primary data were collected from the State Bank
Customers in Madurai District. The researcher used convenience sampling techniques has been adopted to identify the banking

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customers for the present study. The researcher has collected sample of 175 customers in State Bank of India. The researcher has
used simple percentage and weighted average methods.

V. ANALYSIS AND INTERPRETATION

Table 1
Personal Details about State Bank Customers
S.No Gender Number of Defaulting Customers Percentage
1 Female 77 44
2 Male 98 56
Total 175 100
S.No Age(Years) Number of Defaulting Customers Percentage
1. Below 30 33 18.9
2. 30 to 35 9 5.1
3. 35 to 40 34 19.4
4. 40 to 45 42 24
5. 45 to 50 30 17.1
6. Above 50 27 15.7
Total 175 100
S.No Marital Status Number of Defaulting Customers Percentage
1 Married 150 85.7
2 Unmarried 25 14.3
Total 175 100
S.No Educational Number of Defaulting Customers Percentage
Qualification
1. School Level 8 4.6
2. Under Graduate 31 17.7
3. Post Graduate 92 52.6
4. Professional Course 37 21.1
5. ITI 7 4.0
Total 175 100
Source: Primary Data

 It is inferred that the majority of the defaulting customers were male.

 It reveals that the most of the defaulting customers belong to the age group of 40 to 45 years.
 It is inferred that the majority of the defaulting customers are married.
 It reveals that the most of the defaulting customers are educated up to professional course.

1. PROBLEMS FACED BY THE CUSTOMERS AT THE TIME OF BORROWING

The researcher has identified ten problems faced at the time of taking loan at State Bank of India. Ten problems are
complicated formalities, unfavourable attitude of bank officials, need for repeated visit to bank, lack of proper guidance from
bankers, delay in arranging security requirement of bank, no timely support from the bank, delay in sanctioning loan, post loan
history of parents (CIBIL rating), rejection of my loan application by another bank, political interference in the lending process.
Theses problems, the researcher has used weighted average for measuring gthe problems faced at time of taking loan.
Table 2 shows that actual score of problems faced by the customer at the time of borrowing loan.

Table 2
Actual score of problem faced by the defaulting borrowers to taking loan
S.No Particulars 5 4 3 2 1 Total
1. Complicated formalities 50 38 54 8 25 175
2. Unfavourable attitude of bank officials 19 65 56 18 17 175
3. Need for repeated visit to bank 46 47 51 47 46 175
4. Lack of proper guidance from bankers 34 42 43 31 25 175
5. Delay in arranging security requirements of bank 48 39 64 11 13 175
6. No timely support from the bank 19 45 81 20 10 175
7. Delay in sanctioning loan 17 23 97 23 15 175
8. Past loan history of parents(CIBIL rating) 19 1 27 58 70 175
9. Rejection of my loan application by another bank 3 1 23 31 117 175
10. Political Interference in the Lending Process 14 12 25 16 108 175
Source: Primary Data

Table 2 discuss that the actual score gained for the each statement of problem. The researcher has given the actual score
as per the descending order from 5-1 (5-Always, 4- Often, 3-Sometimes, 2-Rarely, 1-Never).

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© 2019 JETIR November 2019, Volume 6, Issue 11 www.jetir.org (ISSN-2349-5162)
Table 3
Weight score of problem faced by the defaulting borrowers to taking loan
S.No Particulars Weight
5 4 3 2 1 Total
Weight Score
1. Complicated formalities 250 152 162 16 25 605
2. Unfavourable attitude of bank officials 95 260 168 36 17 576
3. Need for repeated visit to bank 230 188 153 94 46 711
4. Lack of proper guidance from bankers 170 168 129 62 25 554
5. Delay in arranging security requirements of bank 240 156 192 22 13 623
6. No timely support from the bank 95 180 243 40 10 568
7. Delay in sanctioning loan 85 92 291 46 15 529
8. Past loan history of parents(CIBIL rating) 95 4 81 116 70 366
9. Rejection of my loan application by another bank 15 4 69 62 117 267
10. Political Interference in the Lending Process 70 48 75 32 108 333
Source: Primary Data (Computed Table)
Table 3 concludes that the actual score of problem focused by the defaulting borrowers at time of facing loan at State Bank
of India. The researcher has give weight from actual score on to base of descending order from 5-1 (5 weight for always selected
respondents, 4 weight for often selected respondents, 3 weight for sometimes selected respondents, 2 weight for rarely selected
respondents, 1 weight for never selected respondents).

2. Mean score of problems faced by the borrowers at the time of borrowing

Mean score of problems faced by the defaulting borrower at the time of loan.
Total Weight Score
Mean Score =
Total Respondents
Table 4 shows that the mean score and rank of the problems faced by the defaulting borrowers at the time loan taken.

Table 4
Mean score and rank
S.No Particulars Total Mean Rank
Score
1. Complicated formalities 605 3.46 III
2. Unfavourable attitude of bank officials 576 3.29 IV
3. Need for repeated visit to bank 711 3.54 II
4. Lack of proper guidance from bankers 554 3.17 VI
5. Delay in arranging security requirements of bank 623 3.56 I
6. No timely support from the bank 568 3.25 V
7. Delay in sanctioning loan 529 3.02 VII
8. Past loan history of parents(CIBIL rating) 366 2.09 VIII
9. Rejection of my loan application by another bank 267 1.53 X
10. Political Interference in the Lending Process 333 1.90 IX
Source: Primary Data (Computed Table)

Table 4 shows that the defaulting borrower first face the problem is delay in arranging security requirement of bank
followed by the second problems is need for repeated visit to bank. The third face the problem is complicated formalities followed
by the fourth problems is unfavourable attitude of bank officials. The fifth problem is no timely support from the bank and sixth
problems is lack of proper guidance from bankers. The seventh problem is delay in sanctioning loan and eighth problem is past
loan history of parents (CIBIL rating). The ninth problem is political interference in the lending process and the last problem is
rejection of my loan application by another bank.

VI. CONCLUSION

Every individual need finance to convert his/ her plan into action. State Bank of India stands good at satisfying the need
of finance by proving loan to its customers. SBI‘s customer facing many problems for borrowing loans. The major reason of these
problems is that the bank wants to ensure the security and repaying capacity of the customers. Therefore, steps should be taken by
the government to increase the operating efficiency of banks in providing loans. Long term funds may be made available liberally
to these banks providing housing finance which would enable these banks to provide loans billions of people. This will improve the
living standard of the people.

VII. REFERENCES

[1] Chandra, S, P., (2015). Customer Perception towards Borrowing Bank Loan: An Empirical Study. International Journal of
Productivity Management and Assessment Technologies, 10.4018/IJPMAT.2015010103
[2] Olusanya., Samuel,O., Oyebo,A,O., Ohadebere,E,C.,(2012). Determinants of Lending Behaviour of Commercial Banks:
Evidence From Nigeria, A Co- Integration Analysis(1975-2010). ISRO Journal of Humanities And Social Science.5
(5),71-80.

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© 2019 JETIR November 2019, Volume 6, Issue 11 www.jetir.org (ISSN-2349-5162)
[3] Paul.T.,( 1998).Bank Lending and the Environment: Policies and Opportunities. International Journal of Bank Marketing.
6(6),243-252.
[4] Thangam Alagarsamy and Dr.S.Ganapathy (2017). Deposits and Lending Performance of State Bank of India, “Indian
Journal of Applied Research. 7(11), 219-220.
[5] Thangam,A., & Ganapathy, S.,(2017). Performance of Non-performing Assets (NPA) in State Bank of India, International
journal of Advanced Research in Management and Social Sciences. 6(8),79 – 84.
[6] https://economictimes.indiatimes.com/wealth/borrow/common-problems-faced-by-home-loan-borrowers-in-
india/articleshow/25696340.cms
[7] https://www.sbi.co.in/webfiles/uploads/files/1343212208682_PERSONAL_LOAN_MITC_JUL_12.pdf
[8] http://www.economicsdiscussion.net/banks/nationalized-banks/9-major-problems-faced-by-indias-nationalized-
banks/12927

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